In this episode of Trade Links, host Tim Phillips is joined by Aastha Gupta and Scott Livingstone to revisit two major trade stories shaping the global economy: 10 years on from Brexit, and one year after the US “Liberation Day” tariff announcements. The discussion explores how trade relationships have evolved, where economic frictions remain, and why geopolitics is increasingly influencing global commerce. Brexit – Ten Years On1. UK–EU trade has stabilised, but at a lower level UK goods trade with the EU remains around 10–15% below its pre-Brexit trajectory in volume terms, even though trade values have recovered due to inflation and higher prices.Manufacturing sectors including automotive and chemicals continue to struggle, while food and agriculture recovered after an early shock but remain more volatile.UK services exports have stayed resilient overall, largely thanks to growth in non-EU markets such as the US, masking weaker EU performance.2. Non-tariff barriers remain the biggest drag on trade Although Brexit avoided tariffs, businesses continue to face customs paperwork, rules-of-origin requirements, and border checks.These non-tariff barriers are estimated to create costs equivalent to 7–10% tariffs on goods trade.Smaller exporters have been disproportionately affected, with some firms deciding exporting to the EU is no longer commercially worthwhile.3. Political and economic pressures are encouraging closer alignment The UK and EU are increasingly pursuing pragmatic cooperation in areas such as energy, customs data sharing, food standards, and youth mobility.Sectors including agri-food, pharmaceuticals, chemicals, and electric vehicles could benefit significantly from regulatory alignment.Broader geopolitical pressures — including Russia’s aggression and uncertainty around US policy toward Europe — are creating incentives for deeper UK–EU cooperation without full reintegration.One Year After US “Liberation Day” Tariffs1. The tariffs were dramatic politically, but economically less effective US headline tariff rates jumped from roughly 2.5% to over 20%, levels not seen for more than a century.In practice, exemptions, carve-outs, and negotiations reduced the effective tariff burden closer to around 10%.Despite the scale of the announcements, the US goods trade deficit widened rather than narrowed over the following year.2. Tariffs changed behaviour more than outcomes Companies accelerated imports ahead of tariff implementation before reducing volumes once measures took effect.Firms adapted supply chains through rerouting, exemptions, and alternative sourcing strategies.Businesses increasingly shifted from “just-in-time” supply chains to “just-in-case” inventory models, embedding higher costs into global trade.3. Trade has become a geopolitical weapon Countries responded with bilateral negotiations, retaliatory tariffs, supply-chain diversification, and efforts to avoid provoking Washington.China’s restrictions on rare earth exports highlighted the strategic importance of trade choke points and critical supply chains.The panel argues that the world is entering a more fragmented era of globalisation, where resilience and geopolitical alignment increasingly matter more than pure economic efficiency. All details correct at time of recording. For any terms used please refer to this glossary https://www.natwest.com/corporates/insights/markets/glossary.html Please view our full disclaimer here: https://www.natwest.com/corporates/disclaimer.html
